Lion to expand into MRO

Lion Air, Indonesia's largest privately owned carrier, is expanding further into the maintenance, repair and overhaul sector.

It has a little-known subsidiary called Lion Technic, based at Jakarta's Soekarno-Hatta International airport, that supports Lion's fleet of Boeing MD-80s and Boeing 737-900ERs.

It performs limited line maintenance, powerplant and airframe work.

Some of the work Lion Technic does is basic - such as maintaining the aircraft's interiors and assortment of wheels - but it also has a section that repairs and overhauls aircraft components and a section dedicated to non-destructive testing.

Lion Technic also has an operation at Jakarta's Halim Perdanakusuma International airport that carries out the heavy maintenance checks on Lion's small fleet of MD-80 series aircraft.

The airline's founder and president director Rusdi Kirana says the airline's five MD-80s are kept as stand-by aircraft and will be completely phased out by the middle of next year.

He says Lion plans to establish an aircraft MRO business at Surabaya's Juanda airport and construction of the first aircraft hangar will start early next year.

It can do this because it has signed an agreement with the Indonesian navy to develop and manage a section of the airport that the navy controls, but is awaiting approval from Indonesia's defence minister, adds Rusdi.

The plan is to perform line and heavy maintenance for the airline's fleet of 737-900ERs, he says.

Lion has also signed a firm order for 15 ATR 72-500s with the first three coming in December. Rusdi says Lion plans to carry out the heavy checks on the ATRs rather than send them to Singapore and Malaysia, which Rusdi says is too expensive because of the cost of the ferry flight and higher manpower costs.

He says that it is more economical for Lion to perform its own heavy checks in Indonesia, where labour is cheaper.

"Labour accounts for 60-70% of the costs of a heavy check and the rest is materials," he adds.

Rusdi also says that having work done in-house is more reliable, because the carrier no longer has to rely on third parties that, from time to time, may or may not have slots available for Lion's aircraft.

Rusdi adds that Lion only plans to perform heavy checks on its own aircraft and has no plans to carry out heavy checks for third parties.